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Advani Hotels & Resorts (India) Ltd.

BSE: 523269 Sector: Services
NSE: ADVANIHOTR ISIN Code: INE199C01026
BSE LIVE 11:33 | 09 Dec 49.95 1.45
(2.99%)
OPEN

50.00

HIGH

50.00

LOW

49.95

NSE LIVE 15:00 | 09 Dec 48.70 -0.30
(-0.61%)
OPEN

49.80

HIGH

49.90

LOW

48.70

OPEN 50.00
PREVIOUS CLOSE 48.50
VOLUME 207
52-Week high 66.20
52-Week low 43.40
P/E 29.04
Mkt Cap.(Rs cr) 230.77
Buy Price 48.25
Buy Qty 2.00
Sell Price 49.95
Sell Qty 20.00
OPEN 50.00
CLOSE 48.50
VOLUME 207
52-Week high 66.20
52-Week low 43.40
P/E 29.04
Mkt Cap.(Rs cr) 230.77
Buy Price 48.25
Buy Qty 2.00
Sell Price 49.95
Sell Qty 20.00

Advani Hotels & Resorts (India) Ltd. (ADVANIHOTR) - Chairman Speech

Company chairman speech

Dear Fellow Shareholders

India is now the fastest growing economy in the world with a growth in GDP of over7.3%. However our country whose population is over 1.25 billion and growing has a highunemployment rate of over 7%. We need to create jobs so that our young people aregainfully employed which will lead to all round prosperity and reduction in anti-socialactivities.

Importance of Tourism:

I have always maintained that India has a better chance of success in the 'Services'sector as compared to the 'Manufacturing' sector which requires more capital moredependence on coordination between various factors of production to create a product at acheaper cost than anyone else. The Chinese have succeeded in making everything cheaperlargely because they have a low cost of capital and lower wages in relation toproductivity primarily due to the absence of trade unions democracy. Our major advantageis that India has a large number of educated manpower who can communicate better inEnglish. It should not be a surprise that almost 58% of our GDP is derived from Services.Tourism which accounts for 1 out of 11 jobs globally and which is part of the Servicessector has a great potential in our country. The more liberal Civil Aviation Policyannounced recently will increase air connectivity.

I as the Chairman of the Travel and Tourism Forum of the Indo American Chamber ofCommerce held a one day Seminar in New Delhi recently where prominent speakers from theGovernment tour operators airlines spoke on tourism issues. Mr. Amitabh Kant the CEO ofNiti Aayog and the creator of the 'Incredible India' Campaign in his keynote addressstated "I have always believed that tourism is critical to India and has amultiplier effect in impacting creation of jobs and that the top political leadership thePrime Minister himself is committed to the betterment of the tourism sector". Hefurther stated "I have been involved in the Manufacturing sector and can tell youthat it is a long term gain and takes time in yielding desired results. Tourism on theother hand can give you quick results". Mr. Kant also advocated that India shouldconcentrate on attracting high spending tourists and not mass tourism.

The U.S. Ambassador to India was the Chief Guest. The largest number of foreigntourists to India come from the U.S. and also avail the maximum E-Tourist Visas issued. Onhis recent visit to the U.S. our Prime Minister succeeded in having India selected as thetourism partner of the U.S. for 2017. The Ambassador’s key message which washighlighted by the media was that 'Tourism could support 47 million Jobs by 2025 inIndia'. Mr. Suman Billa the Joint Secretary of the Tourism Ministry while sharingdetails of the budget allocated for tourism admitted that "Inbound has grown almostby 10 percent compared to the previous year. The problem is that we are growing on a verynarrow base if you consider India's diverse product offerings".

In my speech I highlighted that the impact of travel and tourism was also benefitingsmaller towns and that tourism led to the growth of ancillary industries. The otheradvantages for encouraging this industry besides job creation were that when a foreigntourist visited India not only did the tourist spend on hotel accommodation but also onlocal travel shopping etc. The hotel industry earned valuable foreign exchange and assuch was also an exporter. However it did not receive the same incentives received byother exporters. The tax structure was such that India had become a more expensivedestination as compared to competing destinations such as Thailand Sri Lanka and Vietnamwhere the tax on tourism was about 5% as compared to almost 35% in India. India was neverconsidered as a country that one visits for leisure. Also that we needed to changeIndia’s image and the over emphasis on the Delhi-Agra-Jaipur Golden Triangle. Thoughthe beaches of Goa were far superior to Bali we were not as successful in attractingaffluent tourists.

Goa:

The small state of Goa has contributed significantly to India's tourism efforts. Indiahas a huge coast line with excellent beaches on the East Coast and West Coast as well asthe Andaman Islands. But Goa is the one beach destination where tourism has flourished.Goa has recorded an Average Annual Growth Rate of 15% over the last 6 years. There aremany reasons why Goa keeps growing in popularity year after year. German and Britishtourists who discovered Goa in the mid-80’s found that not only were the beaches ofGoa world class but the local Goans welcomed tourists. Then the Russians came to Goa indroves to escape their severe winters. European tourists arrived during the winter monthsby charter flights directly into Goa from London Frankfurt and Moscow. Russian touristswere the main occupants of most hotels in Goa until two years ago. Domestic tourists couldnot access Goa as it was a part of Portugal until 1961 and there was only one dailyflight operating to Goa from Mumbai and Cochin till 1990. Since Indian tourists havebetter incomes to spend on holidays and with increased flights into Goa from every majorcity Goa has become a favourite holiday destination. It has also gained popularity forconferences and weddings. Goa has now become a year round destination with highoccupancies year round. There are 24 daily flights to Goa from Mumbai alone. Since it isdifficult to obtain the permissions from the various authorities to build hotels in Goathe existing hotels are doing extremely well. Our 5 Star Deluxe hotel in South Goa is onone of the largest beaches in the world. Some new hotels have come up but these aresmaller properties and primarily in North Goa which has become commercialized. As suchthe prestigious DefExpo India 2016 was held in South Goa when delegations from IsraelRussia and other countries stayed in our 200 room hotel. Most of the delegates for theeven more high profile BRICS Conference where the President of China is expected will bestaying in South Goa. Our hotel is one of the few selected by the

Ministry of External Affairs to house the VIPs. Goa’s future depends on the StateGovernment’s timely action on issues like cleanliness infrastructure law and orderwhich will determine if Goa can attract affluent tourists. The present airport at Dabolimis equidistant to North and South Goa hotels. However the original expansion plan torenovate the old terminal needs to be implemented.

Financial Highlights:

This has been an excellent year for Goa and especially our hotel. The overalloccupancies of hotels in Goa for the year was 70.7% which is second highest of all citiesin India. The Average Room Rate (ARR) in Goa was also second only to Mumbai. Our hotelachieved an occupancy of 72%. Our REVPAR (Revenue Per Room) increased by over 15% as ourARR went up by 18%. As a result our Company recorded the highest ever net profit of Rs 64million. This represents a growth of 56% year on year. We achieved an increase in grossprofit of 70% compared to last year.

The first quarter results which were published after our Board Meeting on 28th July2016 were exceptionally good. We registered an increase in occupancy from 73.7% to 77.7%.Moreover our Average Room Rate for the first quarter also increased by 9.5% to Rs 5994.As a result our Profit Before Tax increased by 64% and our Profit After Tax increased by31%. As a result of the good performance the Board approved payment of interim dividendof 10% for the financial year 2016-17. We have unutilized FSI of over 100000 sq.ft. andwe propose to add a larger Banquet Hall to capture the increasing Wedding and Conferencebusiness. Our Company is almost debt free.

Acknowledgments:

In closing I would like to place on record my gratitude to the entire Board ofDirectors for their inputs and suggestions. I would like to thank the Central Governmentespecially the Ministries of Tourism Civil Aviation External Affairs Finance and alsothe Government of Goa for their continued assistance to the tourism industry. I would alsolike to thank the Wyndham Hotel Group Bank of Baroda and Bank of India for their support.The employees and executives of the Ramada Caravela Beach Resort are our most importantassets and deserve immense praise. A special thanks to our business associates touroperators and travel agents. Last but not the least I would like to thank all youshareholders for your faith in our Company.

Sunder G. Advani
Chairman & Managing Director
Advani Hotels & Resorts (India) Limited

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